Sharon

http://www.autoloans101.info

So far, you seem to have a good start to a sound plan. Listen to the advice given by others here, as it is good.

The idea of paying off your mortgage within 10 years is great. This will give you tens of thousands (ore even more than a hundred thousand) of additional dollars to invest that would have normally gone to interest payments. So, this will make a substantial difference upon retirement.

I also like that fact that you took matters into your own hands and have done research. You are your best financial adviser and with your own research and smarts you can devise the strategy that best suits you.

An indexing approach to investing is the wisest choice for you given your family situation and the current opportunities which lie in the market – opportunities that have not been seen in over 50 years! Index-funds in the form of ETFs provide the best investment vehicle for you at this stage of your life. Only some of them pay dividends. But the focus with them will be on the accumulated capital gains you can make from them. And they are extremely safe as opposed to buying individual stocks. Just make sure that you diversify in the kind of ETFs you buy; you should buy ones that focus on different industries/sectors (e.g.: Financials, Oil, Real-Estate) and also by region (e.g.: China, Brazil, etc.) to get good diversification. Furthermore, a good way to benefit from index investing is to not be afraid to take some profits – especially when the market has been up for 2-3 years (bull market). This will you will lock-in and cash-out on some profits before market can start to tumble again. Use the proceeds of your sale to buy safer investments during bear markets.

Later on, when you are five years or so from retirement you will need to reposition some of your assets into stocks or ETFs that render higher paying dividends so that you can get a high amount of dividend-income. By then, you should have accummulated enough capital to purchase sound, blue-chip companies that pay high, consistent, dividends. Also try to buy foreign Blue-Chip stocks (European, Asian) that pay dividends (you can sometimes buy these on U.S. exchanges either as ADRs or regular stock). This will keep you even more safe from possible declines in the U.S. dollar.

As for bonds, I would advise against them when you are younger like now. Only when you get 5-10 years near your retirement should you buy them for extra security in your portfolio.

I hope this helps. And continued success with your investments.

I don’t have a dangerous job, I work at my desk. I’m rarely in our car because we don’t commute to work. I’m right in the middle of the healthy body mass index. I don’t drink or smoke, I have normal blood pressure. We live in a building with concrete building with fire sprinklers.

Unfortunately if I recall correctly I think the highest cause of death left for my age bracket is murder by a relative… well I think I’m a nice guy too

Have you taken a look at the mortality tables? The reason it’s cheap for our age is the chances are about 1 in 10,000.

I still don’t see the need, if we die we haven’t lost anything financially that can’t be repaired in time. The only thing that I see the insurance protects is early financial retirement, not a huge loss.

Even $250k seems like a lot of extra coverage, maybe I’d buy $50k worth just as a cushion if they’d sell it at the same rate of $3.60/month.

I generally like to keep fixed costs low, it helps us easily live within our means. That’s why we don’t have a second car, caller id, voice mail, cable tv, magazine or newspaper subscriptions, or gym memberships.

Plus even though I’d meet all of the physical health qualifications for insurance my mom and grandma had “women” cancer, which would disqualify me from the preferred rate. Even though I obviously can’t get their cancer they’d bill me as if I was a smoker or had a heart condition.

So for me it would probably be about $25/month, so say $43/month for both. That works out to $7355 in premiums over 10 years. That’s enough for a year of my kid’s future tuition.

I wonder how much does the average family spend on all the various forms of personal insurance?

I would also look more closely into disability and critical illness if some of it is not covered by your group plan.

With lower income tax, and no savings our current living expenses would only be around $35,000/year, not to mention with one of us dead we could probably buy a little less milk & bread

We don’t have as much as you calculated, but to answer your question yeah we have enough net worth now that we could put everything into real return bonds at 2% and go for at least a decade before it was completely depleted.

I guess that’s not very common for most people, but what do you think of that, is that a justifiable reason not to have any life insurance?

So do you have this nest egg already set up?